FEDERAL COURT OF AUSTRALIA

iNova Pharmaceuticals (Australia) Pty Ltd v Reckitt Benckiser (Australia) Pty Ltd [2018] FCA 1209

ORDERS

IF YOU (BEING THE PERSON BOUND BY THIS ORDER):

(A)    REFUSE OR NEGLECT TO DO ANY ACT WITHIN THE TIME SPECIFIED IN THIS ORDER FOR THE DOING OF THE ACT; OR

(B)    DISOBEY THE ORDER BY DOING AN ACT WHICH THE ORDER REQUIRES YOU NOT TO DO,

YOU WILL BE LIABLE TO IMPRISONMENT, SEQUESTRATION OF PROPERTY OR OTHER PUNISHMENT.

ANY OTHER PERSON WHO KNOWS OF THIS ORDER AND DOES ANYTHING WHICH HELPS OR PERMITS YOU TO BREACH THE TERMS OF THIS ORDER MAY BE SIMILARLY PUNISHED.

THE COURT ORDERS THAT, UPON THE APPLICANT BY ITS SENIOR COUNSEL GIVING THE USUAL UNDERTAKING AS TO DAMAGES:

1.    The respondent be restrained, whether by itself, its servants, agents or otherwise, and until further order, from:

(a)    further distributing or causing to be further distributed to pharmacies the Strepfen point of sale poster (Strepfen POS Poster) (depicted on page 4 of the Originating Application, a further image of which is reproduced at Schedule 1 to these orders); and

(b)    by 4.00 pm on Tuesday, 14 August 2018, further displaying or causing to be further displayed the Strepfen Electronic Billboard Advertisement (depicted on page 5 of the Originating Application).

2.    By 4.00 pm on Tuesday, 14 August 2018, the respondent make a written request to each of the pharmacies to which the Strepfen POS Poster has been distributed in the terms of Schedule 2 to these orders, and enclosing a copy of these orders (in which the penal notice on page 1 may be redacted), such request being able to be made by email.

3.    The respondent direct its sales representatives in writing to exercise reasonable efforts to remove or assist in the removal of the Strepfen POS Poster from public display in any pharmacy which they visit in the ordinary course of their duties.

4.    The respondent confirm in writing to the applicant of its compliance with orders 2 and 3.

5.    Costs be reserved.

THE COURT NOTES THAT:

1.    It will be sufficient compliance with order 1 above in the case of the Strepfen POS Posters already displayed in pharmacies that the respondent takes steps in orders 2 and 3.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

Schedule 1

Schedule 2

[on the letterhead of either Reckitt Benckiser or HWL Ebsworth]

[the pharmacist/manager

Individual pharmacy]

[the managing director/operations manager

pharmacy chain]

The Federal Court of Australia has ordered that Reckitt Benckiser (Australia Pty Ltd) cease further distributing or causing further distribution of the Strepfen POS Poster that has been supplied to your store/chain. I/We attach a copy of the Court’s order.

There is no suggestion that your pharmacy/chain has done anything wrong. However, the Court has required Reckitt Benckiser to request you, as a pharmacy to which the Strepfen POS Poster has been distributed, to remove it from public display until further notice.

Additionally, if our representatives happen to be calling in they will assist with this.

REASONS FOR JUDGMENT

BROMWICH J:

Introduction

1    On 9 August 2018, I heard an application for interlocutory injunctive and related relief pending a final hearing. The applicant, iNova Pharmaceuticals (Australia) Pty Ltd, is a pharmaceutical company that is the supplier of Difflam products, a branded range of medications that provide anti-inflammatory sore throat relief. That range relevantly includes the Difflam Sore Throat Lozenge product. The respondent, Reckitt Benckiser (Australia) Pty Ltd, is the distributor of a rival product, Strepfen Intensive Throat Lozenges, which also provides anti-inflammatory sore throat relief. Broadly speaking, iNova alleges that Reckitt Benckiser has made misleading representations in an advertising campaign comparing the efficacy of Strepfen and Difflam.

2    On 10 August 2018, I granted the substance of the interlocutory relief sought by iNova, albeit not upon all of the grounds advanced. The effect of that relief was to restrain the further distribution and display of Reckitt Benckiser’s comparative advertising campaign and to direct that steps be taken to request that certain posters be removed from pharmacies. I gave a short oral explanation for why the orders were made, and otherwise reserved my reasons. These are the reasons for the orders made on 10 August 2018.

The challenged advertisements

3    iNova’s interlocutory application arose as a result of an advertising campaign commenced by Reckitt Benckiser on 6 June 2018 in relation to Strepfen. The campaign was designed to run through the peak cold and flu season and to conclude by 31 August 2018.

4    The advertising campaign took place in two principal ways:

(1)    by an in-store poster in retail pharmacies; and

(2)    by a video-style electronic billboard advertisement displayed on the floor in shopping centres on a screen that was slightly larger than A3 size.

5    The in-store poster was a point of sale advertisement, typically placed proximate to the Strepfen on sale. The electronic billboard advertisement was substantially the same in content as, but not identical to, the in-store poster, and appeared on the screen for about seven seconds at a time interspersed with advertisements for other products. The material differences are addressed below.

6    An image of the in-store poster accompanied the orders made on 10 August 2018 as follows:

7    A video of the electronic billboard advertisement was in evidence at the interlocutory application hearing. There was also in evidence a screenshot of the electronic billboard advertisement. The differences between the two advertisements are in the precise form of the smaller print on the bottom left-hand side of each, as set out below.

8    The two features of the display poster and the electronic billboard advertisement complained about by iNova were the prominent statements in the top half of each advertisement that Strepfen provides:

Up to 4 hours* relief

and

LONGER LASTING SORE THROAT RELIEF VS. DIFFLAM**

9    Both the poster and the electronic billboard bear two tiers of notation in small print at the bottom of each advertisement, which vary slightly in content. This was evidently designed to make available to consumers additional or qualifying information corresponding to the single and double asterisks in the prominent statements above.

(1)    In the case of the in-store poster, the notations were:

Strepfen works up to 4 hours,

Difflam works up to 3 hours**

Pick it up at a pharmacy today.

*Benrimoj S.I. et. al, Clin Drug Invest 2001;21:183-93.

**As claimed on standard Difflam Sore Throat

Lozenge pack. For the relief from sore throat.

Always read the label. Use only as directed.

Incorrect use could be harmful. If symptoms

persist consult your healthcare professional.

(2)    In the case of the electronic billboard advertisement, the notations were:

Stepfen lozenge works up to 4 hours,

Difflam Sore Throat lozenge

works up to 3 hours**

Pick it up at a pharmacy today.

**As claimed on standard Difflam Sore Throat Lozenge pack.

* Benrimoj S.I. et. al, Clin Drug Invest 2001;21:183-93.

For the relief from sore throat. Always read the label.

Use only as directed. Incorrect use could be harmful.

If symptoms persist consult your healthcare professional.

10    It is convenient to refer to the in-store posters, electronic billboard advertisements and other related advertising or marketing materials that were also deployed and contained the same, or substantially the same, representations collectively as the Strepfen Advertising Materials.

11    The following prominent features can be observed in both the in-store poster and the electronic billboard advertisement that constituted the main part of the Strepfen Advertising Materials, reading from top to bottom and left to right:

(1)    the words, “From the makers of Strepsils”, accompanied by a stylised image of a lozenge;

(2)    the image of a round red lozenge behind the words, “Up to 4 hours* relief”, accompanied by a partial representation of a clock depicting the lapse of four hours;

(3)    the words, “LONGER LASTING SORE THROAT RELIEF VS. DIFFLAM**”;

(4)    the image of the front of a packet of Strepfen Intensive lozenges;

(5)    a blue figurine in white clothing with a head in the shape of a lozenge, holding a packet of Strepfen Intensive lozenges; and

(6)    a single and double asterisk in the text reproduced at [8] above, directing the attention of the reader to additional information reproduced at the bottom of the image in much smaller print, as set out at [9] above.

Additional background information

12    The following additional background information is gleaned from uncontested evidence, submissions and the history of the proceeding thus far.

13    Difflam and Strepfen lozenges are forms of over-the-counter lozenges for the treatment of sore throat and mouth conditions. Difflam is described by iNova as its premium brand of medication for this purpose.

14    The Difflam range of products are sold in pharmacies and, as of relatively recently, also in supermarkets. iNova markets three varieties of Difflam lozenges, two of which have additional ingredients and benefits (Difflam Plus varieties), as well as Difflam sprays, gargles and mouth rinses (Difflam Concentrate varieties). Difflam holds the highest market share in pharmacies by value for the medicated throat products category (around 40%) and the lozenges category (around 44%). The active ingredient in Difflam lozenges is 3 mg of benzydamine hydrochloride.

15    Strepfen is only able to be sold in pharmacies and, by contrast, contains a different active ingredient in each lozenge, being 8.75 mg of flurbiprofen.

16    The two lozenge products compete, along with other products, in the throat lozenge market in pharmacies. Seasonality plays a major role in the throat lozenge market in terms of demand. Sales of Difflam products accordingly peak from June to September, and particularly during July and August. Customers purchasing medicated throat products do not exhibit strong brand loyalty, typically spend a very short amount of time selecting a product and, even when purchasing in pharmacies, most commonly self-select a sore throat treatment. It is thus, on iNova’s account, not a high-involvement purchase, and customers are influenced by broad product advertising while often only briefly looking at the packaging and not usually reading promotional fine print. Reckitt Benckiser, however, drew a distinction in this regard between printed advertising and broadcast or electronic advertising.

17    iNova asserted that it first became aware of the Strepfen Advertising Materials on 10 July 2018. While that assertion was queried by Reckitt Benckiser, it was not ultimately challenged.

18    iNova subsequently made a complaint to Reckitt Benckiser by telephone on 13 July 2018, in writing on 16 July 2018 and then in writing to the Therapeutic Goods Administration on 16 July 2018.

19    On 30 July 2018, iNova filed in this Court an originating application, statement of claim and urgent interlocutory application, along with supporting affidavits. Reckitt Benckiser asserted delay on the part of iNova in commencing proceedings. That issue is returned to below on the topic of the balance of convenience.

20    The proceeding initially came before the Court on 30 July 2018, on which occasion Burley J as duty judge made orders for the short service of iNova’s originating process. The matter was brought back before his Honour on 1 August 2018, with his Honour then fixing iNova’s interlocutory application for hearing before me as duty judge on 9 August 2018.

21    iNova’s substantive case, still to be heard, is that Reckitt Benckiser, in publishing the above statements, has engaged in misleading or deceptive conduct and contravened various provisions of the Australian Consumer Law (ACL), as set out in Schedule 2 of the Competition and Consumer Act 2010 (Cth). iNova sought (and obtained), by way of this interlocutory application, orders restraining Reckitt Benckiser from further distributing, displaying or causing to be distributed or displayed, materials tied to that advertising campaign prior to the hearing of iNova’s claims for final relief, along with collateral relief in aid of that restraint.

22    iNova’s originating application seeks final injunctive relief in substantially the same form as the interlocutory relief sought and outlined below, as well as various forms of declarations for contraventions of ACL provisions relating to misleading or deceptive conduct or representations, orders for corrective material and damages. iNova’s statement of claim outlines in detail the representations that it asserts arise from the Strepfen Advertising Materials, the nature of the statutory contraventions and conduct requiring restraint that are attributable to Reckitt Benckiser, and the associated loss and damage suffered by iNova as a result.

The relevant principles

23    The principles pertaining to misleading or deceptive conduct by way of advertising, and especially comparative advertising and advertising with disclaimers (that is, referenced additional or qualifying information as to dominant claims), may be summarised as follows.

24    In relation to misleading or deceptive conduct:

(1)    Conduct is misleading or deceptive, or likely to mislead or deceive, if it has a tendency to lead into error, but there must be a sufficient causal link between the conduct and error on the part of persons exposed to it: Australian Competition and Consumer Commission v TPG Internet Pty Ltd [2013] HCA 54; 250 CLR 640 at [39].

(2)    Misleading or deceptive conduct is not necessarily confined to the formation of the contract for the purchase of goods or services, but may also occur at the antecedent point at which a member of the target audience of the conduct has been enticed into an erroneous belief or understanding by the conduct, even if the true position is understood before the contract is complete: TPG at [45].

(3)    The dominant message in an advertisement is of particular importance: TPG at [45].

(4)    If conduct by way of representations can be seen to be directed to a particular class of persons, that is to be judged by its likely effect on a reasonable member of that class: Campomar Sociedad, Limitada v Nike International [2000] HCA 12; 202 CLR 45 at [103].

(5)    The members of such a class are not always going to be homogenous, and may vary in education, intelligence, perception, time spent evaluating a representation, distraction or preoccupation by reason of such things as shopping for other items, and evanescent factors such as the attraction or interest generated by the way in which a representation is presented, much or all of which is likely to have been taken into account in designing advertisements: see, e.g., Australian Competition and Consumer Commission v Coles Supermarkets Australia Pty Ltd [2014] FCA 634; 317 ALR 73 at [43] as to aspects of this point.

(6)    The capacity to mislead or deceive may be inferred from an intention to achieve that outcome, even though intention is not an element of the statutory cause of action: TPG at [55].

(7)    It is necessary to ascertain whether each asserted representation is in fact reasonably conveyed: Reckitt Benckiser (Australia) Pty Limited v Procter & Gamble Australia Pty Limited [2015] FCA 753 at [34]; Samsung Electronics Australia Pty Ltd v LG Electronics Australia Pty Ltd [2015] FCA 227; 113 IPR 11 at [73], citing Tobacco Institute of Australia Ltd v Australian Federation of Consumer Organisations Inc [1992] FCA 630; 38 FCR 1 at 50.

(8)    It is not enough to confuse, or to cause questions to be asked: Coles at [39], [41]. There must be some real capacity to lead into error, viewing the conduct as a whole and in context: Butcher v Lachlan Elder Realty Pty Ltd [2004] HCA 60; 218 CLR 592 at [109]; Campbell v Backoffice Investments Pty Ltd [2009] HCA 25; 238 CLR 304 at [102].

25    In relation to disclaimers and the like:

(1)    There may be occasions upon which the effect of otherwise misleading or deceptive conduct may be neutralised by an appropriate disclaimer: Abundant Earth Pty Ltd v R & C Products Pty Ltd (1984) 59 ALR 211 at 217.

(2)    However, generally speaking, a person engaging in misleading or deceptive conduct cannot use the device of a disclaimer to evade responsibility, unless that disclaimer erases the proscribed effect: Benlist Pty Ltd v Olivetti Australia Pty Ltd (1990) ATPR 41-043; (1990) ASC 55-997. Benlist was discussed by the High Court in Butcher at [70]-[72] and was noted as a conclusion that was open in that case but was distinguished on the facts.

(3)    A disclaimer having the effect of dispelling the otherwise misleading or deceptive effect of conduct will, in any event, be a rare occurrence given the onus on the person making the representation to establish that the overall effect is benign: Hutchence v South Seas Bubble Co Pty Ltd (1986) 64 ALR 330 at 338.

(4)    Disclaimers or qualifications must be taken into account in evaluating the conduct as a whole: Backoffice Investments at [25].

(5)    Carelessness on the part of consumers in how they treat or view a representation, including any disclaimers, may be relevant: TPG at [49].

(6)    It may be relevant to consider whether an advertisement or other representation or conduct has the capacity to lead a consumer into error because it selects some words for emphasis and relegates the balance, including any disclaimer, to relative obscurity: TPG at [51]

(7)    A disclaimer must be very clear when there is a substantial disparity between the primary representation and the true position: National Exchange Pty Ltd v Australian Securities and Investments Commission [2004] FCAFC 90; 49 ACSR 369 at [55]. In that case, the Full Court observed at [56] that an analogy could be drawn from exemption clause cases, such as Curtis v Chemical Cleaning & Dyeing Co [1951] 1 KB 805 at 809; [1951] 1 All ER 631 at 632, in which Denning LJ had said, “[w]hen one party puts forward a printed form for signature, failure … to draw attention to the existence or extent of the exemption clause may in some circumstances convey the impression that there is no exemption at all, or at any rate not so wide an exemption as that which is in fact contained in the document.”

(8)    A disclaimer that is static may bear more weight than one that is evanescent. In the printed format, even an asterisk that indicates the presence of additional information, if it is sufficiently prominent and the qualifying text is sufficiently proximate, may be effective to draw attention to an explanation of, or qualification upon, a statement made in advertising: George Western Foods Ltd v Goodman Fielder Ltd [2000] FCA 1632; 49 IPR 553 at [46]. However, the significance of footnotes to which attention is drawn by asterisks will depend upon the material in question and the surrounding circumstances: Astrazeneca Pty Limited v GlaxoSmithKline Australia Pty Limited [2006] FCAFC 22; (2006) ATPR 42-106 at [22].

26    In relation to comparative advertising:

(1)    An advertiser can lawfully compare a particular aspect of its product or service favourably with the same aspect of a competitor’s product or service, provided the factual assertions are not untrue or misleading half-truths: Gillette Australia Pty Ltd v Energiser Australia Pty Ltd [2002] FCAFC 223; 193 ALR 629 at [20]. There does not always, or even invariably, have to be any painstaking comparison of all pertinent similarities and differences between competing products or services before a relevant distinction may properly be emphasised that is likely to be relevant to a consumer: Gillette at [23]-[24]. The highlighting of genuine distinctions may be beneficial to consumers in advancing competition and the making of informed choices: Gillette at [20], [53], [91]-[93]; see also Gillette Australia Pty Ltd v Energizer Australia Pty Ltd [2005] FCA 1647 at [14].

(2)    Where comparative claims are made that are of a scientific nature or otherwise professing expertise, proof that there is no such foundation for those claims may be sufficient to establish that the claims are misleading: Janssen Pharmaceutical Pty Limited v Pfizer Pty Ltd (1985) 6 IPR 227 at 234. The onus may shift to the person making the comparison, who will otherwise suffer the risk of it being found to be misleading by reason of the absence of any proper foundation for a claim being established: Johnson & Johnson Pacific Pty Ltd v Unilever Australia Ltd (No.2) [2006] FCA 1646; 70 IPR 574 at [105].

iNova’s interlocutory application

27    By way of this interlocutory application, iNova sought the following interim relief, upon it, by its counsel, giving the usual undertaking as to damages:

(1)    An order restraining Reckitt Benckiser from distributing, exhibiting, displaying, broadcasting or communicating to the public, or causing to be so done, the Strepfen Advertising Materials or any material that is substantially identical.

(2)    An order restraining Reckitt Benckiser from making, or causing to be made, any one or more of the representations outlined in iNova’s statement of claim, or any representation that is substantially identical to, or the same in effect as, any one or more of those representations.

(3)    An order that Reckitt Benckiser provide, within three business days and as verified by affidavit, particulars of the Strepfen Advertising Materials, and any other substantially identical materials, that have been distributed or displayed in Australia, including the locations to or in which they were distributed or displayed.

(4)    Procedural orders requiring that Reckitt Benckiser take certain steps to ensure compliance with the above proposed orders if made, including making written requests to pharmacies and sales representatives to ensure compliance or exercise reasonable efforts to do so.

(5)    Costs.

28    The relief ultimately sought by iNova and granted was somewhat different to the above pleading, as reflected in the orders made on 10 August 2018.

The representations iNova contended were conveyed

29    iNova’s written submissions asserted that the following representations were made by the Strepfen Advertising Materials (emphasis in original):

By exhibiting or displaying its advertisements, [Reckitt Benckiser] has represented that:

(a)    Strepfen Intensive lozenges provide up to 4 hours’ relief from a sore throat (4 Hours’ Representation);

(b)    Strepfen Intensive lozenges provide longer lasting relief from a sore throat than

(i) standard Difflam lozenges and (ii) any Difflam product for the treatment of sore throats, including Difflam Plus and Difflam Concentrate varieties (Longer Lasting Relief Representation);

(c)    the only material difference between Strepfen Intensive lozenges and (i) standard Difflam lozenges or (ii) any Difflam product for the treatment of sore throats, including Difflam Plus and Difflam Concentrate varieties, in the treatment of sore throats, is that Strepfen Intensive lozenges provide longer lasting relief (Only Material Difference Representation);

(d)    [Reckitt Benckiser] has:

(i)    undertaken valid and reliable scientific testing, or is otherwise in possession of valid and reliable scientific data, to substantiate the truth of the 4 Hours’ Representation; and

(ii)    has undertaken valid and reliable comparative scientific testing, or is otherwise in possession of valid and reliable comparative scientific data, comparing Strepfen Intensive lozenges and the relevant Difflam product, to substantiate the truth of the Longer Lasting Relief Representations and Only Material Difference Representations

(each a Scientific Basis Representation).

30    Each of iNova’s asserted 4 Hours’ Representation, Longer Lasting Relief Representation and Only Material Difference Representation was tied to an asserted corresponding Scientific Basis Representation. A slightly varied form of the above asserted representations also appears in iNova’s statement of claim.

31    Reckitt Benckiser accepted that the 4 Hours’ Representation and the first Longer Lasting Relief Representation were indeed conveyed, but asserted that neither was misleading or deceptive when taken as a whole, and especially when the notations were taken into account.

32    Reckitt Benckiser denied that the second Longer Lasting Relief Representation, either of the Only Material Difference Representations, or either of the Scientific Basis Representations were conveyed.

33    iNova made a number of submissions in relation to each of the asserted representations, which are canvassed below. It also made further submissions as to the balance of convenience. iNova submitted that not only had it demonstrated a prima facie case for the interlocutory relief sought, but that the balance of convenience also favoured the grant of the relief sought. Reckitt Benckiser disputed iNova’s contentions as to why, overall, any of the representations were either made or were capable of being misleading or deceptive to the necessary prima facie standard, and thus denied that there was any serious question to be tried, or that the balance of convenience favoured the grant of interlocutory relief.

34    It is convenient to address in turn each asserted representation, the competing submissions, and the conclusion I have reached on a limited interlocutory basis.

4 Hours’ Representation

35    iNova’s submissions on this representation focussed on the key clinical study cited within the Strepfen Advertising Materials at the single asterisk notation, “Benrimoj S.I. et. al. Clin Drug Invest 2001;21:183-93”. The evidence revealed that this was a reference to a report of a scientific study funded by Boots Healthcare International, Nottingham, in the United Kingdom. It was published in 2001 in a journal directed to clinical drug investigations, using the shortened title “Clin Drug Invest”. The copy of the 11-page published report in evidence indicated that the study was led by Professor S.I. Benrimoj, Professor of Pharmacology Practice at the University of Sydney, and four other persons. The full title of the report is “Efficacy and Tolerability of the Anti-inflammatory Throat Lozenge Flurbiprofen 8.75mg in the Treatment of Sore Throat: A Randomised, Double-Blind, Placebo-Controlled Study”. It is convenient to refer to the report as the Benrimoj study report.

36    As the title suggests, the Benrimoj study report compared the efficacy and tolerability of flurbiprofen lozenges at 8.75mg concentration (as in Strepfen lozenges) and 12.5mg concentration (not presently relevant), compared only with placebo lozenges.

37    iNova relied upon the fact that the Benrimoj study report was not in terms a study comparing flurbiprofen (or Strepfen) with the active ingredients in Difflam products. It also relied, on the basis of iNova’s expert report, upon the fact that the Benrimoj study report in terms excluded a number of classes of people, including people with chronic sore throats, sufferers of asthma and women not taking contraceptives, who represent significant parts of the population but are not referred to in the Strepfen Advertising Materials. iNova thus submitted that it is unsafe for Reckitt Benckiser to rely on the Benrimoj study to support the claims made in the Strepfen Advertising Materials as to providing up to four hours of relief.

38    iNova submitted that the 4 Hours’ Representation (and its corresponding Scientific Basis Representation) could not be substantiated by the Benrimoj study report for at least the following reasons:

(1)    The Benrimoj study had particular inclusion and exclusion criteria, in that it only included patients with sore throats that had resulted from an upper respiratory tract infection and excluded patients who were suspected to have a bacterial infection. iNova submitted that the 4 Hours’ Representation was not qualified as to the cause of the sore throat for which the relief was targeted, and that the Benrimoj study could not substantiate that representation with respect to sore throats that were caused by infections other than upper respiratory tract infections, or by bacterial infections.

(2)    The Benrimoj study did not establish the efficacy of flurbiprofen 8.75mg lozenges, as measured in total pain relief, beyond the two-hour mark. iNova asserted the importance of the total pain relief scale.

(3)    iNova cited a separate study, the Watson study, which it asserted used the same methodology, population size and design parameters as the Benrimoj study, as having concluded that flurbiprofen 8.75mg lozenges did not significantly increase total pain relief over 15 to 120 minutes compared to a placebo, and that there was no significant difference in total pain relief over 15 to 360 minutes compared to a placebo.

39    Reckitt Benckiser submitted that the Strepfen Advertising Materials did indeed convey a representation that Strepfen lozenges provide up to four hours of relief from a sore throat, and that there is clearly an adequate scientific basis for that representation in the Benrimoj study report. Reckitt Benckiser dealt with iNova’s complaints as to the Benrimoj study report as follows:

(1)    As to the complaint that the Benrimoj study report only included patients with upper respiratory tract infections and excluded patients who were suspected to have a bacterial infection, Reckitt Benckiser submitted that an upper respiratory tract infection is a common cause of a sore throat and its conditions are consistent with sore throats generally, including throat soreness and throat swelling. Furthermore, it submitted that most sore throats are caused by viral, as opposed to bacterial, ailments. Finally, Reckitt Benckiser cited two further studies, the Shepherd study and the Schachtel study, as having come to the same conclusion that throat infections are similarly relieved by flurbiprofen 8.75mg for four hours. Reckitt Benckiser thus submitted that this complaint was baseless.

(2)    As to the complaint that the Benrimoj study report did not establish efficacy measured in total pain relief beyond two hours, Reckitt Benckiser submitted that in the Benrimoj study report, total pain relief was measured over a period of six hours, and the measure of total pain relief taken did not invalidate the results, namely that the relief provided by flurbiprofen 8.75mg was significantly better than the placebo at all individual time points between 30 minutes and four hours. Reckitt Benckiser submitted that this provided an adequate scientific basis for the 4 Hours’ Representation.

(3)    As to the complaint that the Watson study concluded that flurbiprofen 8.75mg did not significantly increase total pain relief over 15 to 120 minutes compared to a placebo, and that there was no significant difference in total pain relief over 15 to 360 minutes compared to a placebo, Reckitt Benckiser submitted, in reliance on the evidence of Professor Christie, that the Watson study results did not invalidate the Benrimoj study report, and that a meta-analysis of the two studies would likely result in a finding that disclosed the superior efficacy of flurbiprofen 8.75mg on a statistically significant basis.

40    I was prepared to assume for interlocutory relief purposes, based on the face and presentation of the Benrimoj study report as published, including the way in which it is written, that it was a report of a peer-reviewed scientific study. It might be considered seriously misleading or deceptive to refer to that report as supporting the 4 Hours’ Representation if it was not.

41    Even the most diligent reader of the in-store poster or of the electronic billboard advertisement would not be able to discern from the mere notation references to the Benrimoj study report what the content of the scientific basis was for the 4 Hours’ Representation. The question was therefore not whether the reference to that report qualified any otherwise misleading representation, as the reference would not be sufficient for that purpose. Rather, the question was whether the Benrimoj study report itself provided sufficient support, for interlocutory relief purposes, for the conclusion that the 4 Hours’ Representation was not in fact misleading or deceptive in the first place. It was sufficient for interlocutory relief purposes to consider that report at a reasonably high level of generality, having regard to the prima facie test in play:

(1)    The abstract to the Benrimoj study report was as follows (emphasis in original):

Objective: This randomised, double-blind, parallel group study compared the efficacy and tolerability of flurbiprofen lozenges (8.75mg or 12.15mg) with demulcent placebo lozenges in the treatment of patients with sore throats due to upper respiratory tract infection.

Study participants: A total of 320 patients with objective and subjective evidence of sore throat were randomised to treatment with flurbiprofen 8.75mg (n=128), flurbiprofen 12.5mg (n=64) or placebo (n=128) lozenges.

Main Outcome Measures: Efficacy was assessed by changes in subjective ratings scales measuring pain relief, throat soreness and swollen throat at specified intervals over a 6-hour period following administration of a single dose. Tolerability was assessed over a 5-day multiple-dose regimen.

Results: Flurbiprofen 8.75mg lozenge was significantly superior to placebo for the primary efficacy variable, total pain relief summed over 15 to 120 minutes (TOTPAR15-120 min), and for reducing throat soreness over 2 hours and swollen throat over 2 and 6 hours (p < 0.05). Flurbiprofen 12.5mg treatment was not significantly better than flurbiprofen 8.75mg. There were no significant differences between treatment groups in the incidence of adverse events when reports of taste perversion, which reflects an aspect of patient acceptability rather than tolerability, were removed from the analysis (p = 0.776).

Conclusions: The efficacy and tolerability profile of flurbiprofen 8.75mg lozenges indicated that they provide a convenient treatment for patients with sore throat. Symptomatic relief was rapid, occurring within 15 minutes of administration due to lozenge demulcency, and statistically significant differences between active and placebo lozenges were detected within 30 minutes and sustained over 4 hours.

(2)    The contents of the Benrimoj study report explain how the process described in the abstract was executed and how the findings were measured. The statistical and other scientific jargon used cannot be meaningfully interpreted in the limited time available, even if that was possible without a process of evidence or other explanation. It suffices to say that the Benrimoj study report bears the ostensible hallmarks of a genuine scientific study.

(3)    The conclusion to the report was as follows:

Flurbiprofen 8.75mg lozenges are efficacious in reducing pain, soreness and the perception of swelling associated with sore throats. Benefits of treatment were perceived rapidly, being statistically significant 30 minutes after lozenge administration and sustained for at least 4 hours. Although a flurbiprofen 8.75mg lozenge is associated with an increased incidence of taste perversion in comparison with placebo, this is not considered to be a tolerability issue. Similar efficacy results were also demonstrated for flurbiprofen 12.5mg, along with a further increased incidence of taste perversion. Overall, flurbiprofen 8.75mg is a well tolerated and effective treatment for individuals with a sore throat.

42    Having regard to the foregoing, I was satisfied that the Benrimoj study report provided a sufficient prima facie basis for making the 4 Hours’ Representation, because it demonstrated that Strepfen does provide up to four hours of relief from a sore throat for common causes of that ailment. The fact that it does not do so for all causes is not enough to make the representation misleading or deceptive, especially as no claim is made that it does provide relief in all cases. I was therefore not able to be satisfied, on the evidence before me, that the 4 Hours’ Representation was misleading or deceptive, to a prima facie standard. It follows that iNova did not make out a sufficient case for an interlocutory injunction based upon that representation. This finding does not make a contrary finding after a final hearing impossible, but it may be a difficult hurdle to overcome.

Longer Lasting Relief Representation

43    iNova advanced the following three contentions in relation to this representation:

(1)    The Longer Lasting Relief Representation was made not just in relation to Difflam Sore Throat Lozenges, but in relation to all Difflam products, because the statement imparting the representation, “LONGER LASTING SORE THROAT RELIEF VS. DIFFLAM**”, did not identify or limit the Difflam product being compared, and because the fine print was difficult to read, likely to be obscured and likely to be misunderstood if read. Furthermore, Reckitt Benckiser had not identified any reasonable grounds for making the Longer Lasting Relief Representation in relation to all Difflam products, and the representation should thus be taken to be misleading by the operation of s 4(1) of the ACL.

(2)    As the 4 Hours’ Representation was misleading or deceptive for the reasons separately submitted, and the Longer Lasting Relief Representation relied on the 4 Hours’ Representation, the Longer Lasting Relief Representation was also misleading or deceptive. This aspect of iNova’s argument did not warrant further consideration by reason of the adverse conclusion reached above about the 4 Hours’ Representation.

(3)    As to the corresponding Scientific Basis Representation, the expert opinion expressed by Professor Christie for Reckitt Benckiser, which was to the effect that a comparative study was not necessary to substantiate this representation as the efficacy and duration of relief of the Difflam product had not been demonstrated, was not a rational opinion. This was said to be so because Professor Christie irrationally assumed that Difflam products had no efficacy at all, and therefore that Strepfen did not require a comparative clinical study, despite Difflam products having been a category leader of sore throat treatments in pharmacies for multiple decades. It was submitted that Professor Christie’s opinion did not have a logical relationship with his specialised knowledge and, in the event that that opinion was admissible, the Court should give it no weight for its irrationality. Rather, the Court should consider that a comparative clinical study would be a scientifically valid and reliable way to substantiate the Longer Lasting Relief claim, and that the corresponding representation could not be validly made simply on the basis of the medicine labelling on the back of the Difflam packaging, or the absence of trial data for the Difflam product, both of which Reckitt Benckiser and its expert relied upon. In the absence of a comparative study, it was submitted that this representation was again misleading or deceptive by reason of being made without reasonable grounds, so as to engage s 4(1) of the ACL.

44    Reckitt Benckiser accepted that the Strepfen Advertising Materials conveyed the representation that Strepfen lozenges provide longer lasting relief than standard Difflam lozenges, but denied that the materials made a representation that Strepfen lozenges provide longer lasting relief than any Difflam product for the treatment of sore throats, including Difflam Plus varieties and Difflam Concentrate varieties. Reckitt Benckiser submitted in support of that proposition that:

(1)    It was clear from the Strepfen Advertising Materials that it was only lozenges that were being compared, as evidenced by the “**” disclaimer, the fact that a package of Strepfen lozenges was displayed on the materials, and the lozenge-reminiscent imagery on the advertisement, including circular images surrounding the statement “Up to 4 hours* relief” and the round blue head of the character promoting the goods. Reckitt Benckiser submitted that a consumer would understand that it was Strepfen lozenges and standard Difflam lozenges that were being compared. It was submitted that, as the advertisements were not television advertisements and were not fast-moving goods in supermarkets, but, rather, medicated products sold in pharmacies, consumers would take greater time to understand the message that was being conveyed. (This submission did not seem to acknowledge the relevant similarity between the electronic billboard advertisement and television advertising, with the former being even more evanescent than the latter.)

(2)    There was no evidence of any clinical study that supported the efficacy of Difflam lozenges over a placebo, so as to provide a scientific basis for any claim that Difflam lozenges provided relief for any period of time. It was submitted that the lack of evidence served on this point by iNova should compel the Court to infer that no such evidence exists, and that a head-to-head study between Strepfen and Difflam lozenges was not required to make a comparative claim of Strepfen’s superior efficacy. Reckitt Benckiser disputed iNova’s claim that this view, which was advanced on the basis of Professor Christie’s evidence, was irrational and not based on specialised knowledge, and noted that the expert evidence provided by Professor Carroll for iNova did not suggest that Professor Christie’s view was irrational, despite not agreeing with his conclusion.

45    Reckitt Benckiser submitted, on the basis of the foregoing, that a valid comparative claim could be made as to the longer lasting efficacy of Strepfen lozenges over standard Difflam lozenges, for which it asserted there is no evidence as to efficacy. Reckitt Benckiser submitted that it was entitled to take the claim on the Difflam packaging, or at least the lack of a claim for efficacy beyond three hours, as a measure with which to then compare the asserted efficacy of Strepfen.

46    The notations were different as between the poster and the electronic billboard advertisement. It was no part of Reckitt Benckiser’s case at the time of the interlocutory hearing that the comparative representation was not, taken alone, misleading or deceptive, but, rather, that it should not be taken alone. Reckitt Benckiser submitted that, taken as a whole, a reasonable consumer in the more measured environment of a pharmacy, rather than a supermarket, would read the notations with the comparative representation (including the reference to the Benrimoj study report) and not be left with any misleading impression, or otherwise be liable to be deceived.

47    Reckitt Benckiser submitted that, in the absence of a clinical study in evidence to support the efficacy of Difflam, it was, in effect, free to rely upon the findings in the Benrimoj study report to support its asserted four-hour efficacy of Strepfen and compare that to the instruction on the Difflam Sore Throat Lozenges, which made reference to “works for up to 3 hrs”.

48    There were at least three fatal flaws in Reckitt Benckiser’s argument. More may become apparent, or those listed below may be allayed, upon further evidence, submissions and consideration at a final hearing. The first fatal flaw was that on the poster, the reference in the second, smaller level of notation to “standard Difflam Sore Throat Lozenge pack” did not make it sufficiently clear what was being referred to, either as to content or as to prominence. It did not sufficiently justify or qualify the main representation as to Difflam lozenges generally. The electronic billboard advertisement was better in form but not in substance, with the first level of notation, although larger, only referring to “Difflam Sore Throat Lozenge[s]”, and thus not excluding Difflam Plus lozenge varieties.

49    The second fatal flaw in Reckitt Benckiser’s argument was that instructions as to how to use a medicine did not, at least in the circumstances of this case at the interlocutory stage, advance a sufficient basis for the representations made. The overall representation was not merely as to differing claims between competing products, but as to a different objective factual situation. Such a claim needed to be clearly spelt out if it was to be understood not merely as a comparison as to usage claims, but as a comparison of actual efficacy, and for there to be a valid basis for such a claim. However, the only basis for the claim was a comparison between the Stepfen claims, albeit with some scientific support, and the standard Difflam lozenge packet instructions for use. On the evidence and submissions before me, this was an inadequate basis for the claims that were made.

50    The third fatal flaw in Reckitt Benckiser’s argument was that the products do not appear to be, in fact, sufficiently similar for it to have made the comparison in question without making more of the relevant differences between the products clear as well. That was especially so when regard was had to the more limited class of Stepfen users. Without further information, this representation was not informing consumer choice, but, rather, distorting it.

51    I also rejected a submission by senior counsel for Reckitt Benckiser that the audience for the representation was confined to Difflam lozenge users who could also safely take Strepfen Intensive lozenges. That qualification was not contained in the representations or notations. It would only become apparent upon reading the additional warnings on the Strepfen Intensive lozenge pack and comparing it with the less extensive warning on the Difflam Sore Throat Lozenge pack and whatever warning was on the other two Difflam lozenge packs. It is highly unlikely that any consumer was going to be comparing the warnings on at least two, and up to four, different lozenge packs before making a purchase decision.

52    The question then arose as to whether the Longer Lasting Relief Representation remained prima facie misleading or deceptive when due regard was given to the two tiers of notations at the bottom of the poster and at the bottom of the electronic billboard advertisement. That is, did they sufficiently modify what was otherwise communicated to consumers so that the effect of any otherwise misleading representation was reversed or erased? In that regard, see Butcher, especially per the majority, Gleeson CJ, Hayne and Heydon JJ, at [39] (read with [51] and [71]-[72]) and per McHugh J in dissent as to the result at [152]. The thrust of the comparative representation, as inadequately and insufficiently corrected by the in-store poster disclaimer and not corrected at all by the electronic billboard advertisement disclaimer, was that Stepfen had longer lasting efficacy than all Difflam lozenges, whilst relying for that assertion only upon claims made in standard Difflam lozenge packet use instructions. I was therefore comfortably satisfied that there insufficient modification of the primary representation I found to be made out.

53    It follows that I was satisfied on the evidence before me that the Longer Lasting Relief Representation had been established to be misleading or deceptive to a sufficiently strong prima facie standard to constitute a sound arguable case pending final determination.

Only Material Difference Representation

54    iNova also submitted that the reference to “Difflam” in the phrase “LONGER LASTING SORE THROAT RELIEF VS. DIFFLAM**” was not confined to lozenges and extended to all Difflam products for treating a sore throat. That characterisation cannot be sustained when due regard is had to the lozenge-identifying features referred to at [11] above. However, iNova’s primary argument was that the representation made at least did not distinguish between the various types of Difflam lozenges on the market. This more limited asserted comparative representation was a clearer and sounder basis upon which to proceed, confined as it was to Difflam lozenges. This conclusion supported to a degree, but not entirely, the submission made by Reckitt Benckiser, which sought to confine the representation to the so-called standard lozenge, an argument that was rejected, as outlined at [48] above. As iNova’s argument progressed at the hearing of the interlocutory application, more reliance was placed on the asserted comparison with the two other forms of lozenges also.

55    iNova submitted that there was a real risk, in light of the direct comparison made between Strepfen and Difflam lozenges in the Strepfen Advertising Materials and the similarities of the products in nature and function, that consumers might be led to believe that the only material difference between the different manufacturers’ products is that Strepfen lozenges provide longer lasting relief. iNova asserted that Reckitt Benckiser had previously said that the two products were indeed substitutable.

56    However, iNova submitted that a difference in duration of relief, if that is even so, was not the only material difference between the two products. Rather, iNova pointed to the different safety profile of Strepfen in comparison to Difflam products. iNova asserted that Strepfen bears a number of warnings and contraindications, and that its active ingredient is not safe for general use and restricts access to the product to in-pharmacy only. iNova asserted that Strepfen cannot be used by a number of persons who use Difflam.

57    In light of the difference in safety profile, iNova submitted that the Only Material Difference Representation and its corresponding Scientific Basis Representation were misleading or deceptive.

58    Reckitt Benckiser submitted that this alleged representation was not conveyed, that it was purely a lawyer’s construct, and that no reasonable consumer in the relevant class would understand the Strepfen Advertising Materials in that way. It further submitted that, even if the representation were conveyed, it could not be made out to be false or misleading, given the lack of evidence supporting either the efficacy of Difflam lozenges or other material differences in the treatment of sore throats by other products.

59    Reckitt Benckiser also submitted that none of the Scientific Basis Representations were conveyed as they would not be understood in that way by a significant proportion of the relevant class of consumers. It submitted that even if the Scientific Basis Representations attached to the 4 Hours’ Representation were made out, it was not misleading as there was an adequate scientific foundation for that statement and the comparative statement between Strepfen and Difflam lozenges, in light of the Benrimoj study report and the lack of evidence to support the efficacy of Difflam.

60    Reckitt Benckiser thus submitted that iNova had not made out a prima facie case for interlocutory relief based on this asserted representation.

61    The resolution of this part of iNova’s case produced the least clear-cut outcome. Put simply, I was unable to be satisfied, on the material before me, that a prima facie case had been established that the Only Material Difference Representation had been made out, but fell well short of concluding, even prima facie, that it was incapable of being made out. That is because I was unable to accept, on the limited available evidence, and on the limited scope of the arguments that had been advanced, that such a complicated representation would have been conveyed to ordinary consumers. The same conclusion applied to the corresponding Scientific Basis Representations. It may be that each of these asserted representations could be made good at a final hearing, but this shortcoming was a significant impediment, on the available evidence, to establishing a prima facie case for interlocutory relief purposes.

Balance of Convenience

62    For the reasons submitted in relation to the above three overarching representations, iNova submitted that it had made out a strong prima facie case for interlocutory injunctive relief. Only one of those overarching representations was demonstrated to the requisite prima facie standard. The effect of that conclusion is that I was of the view, prima facie:

(1)    that a reasonable reader would have understood that it was being represented that the relief from a sore throat provided by Strepfen lozenges was longer lasting than the relief provided by any Difflam lozenges; and

(2)    that such a representation was misleading or deceptive.

63    That finding, and the other findings that I declined to make, may overstate or understate findings properly available to be made after a final hearing, with the benefit of more detailed evidence that has also been tested and more detailed and extensive submissions.

64    iNova made the following further submissions as to the balance of convenience. First, iNova submitted that it would suffer irreparable harm if Reckitt Benckiser was not restrained from continuing to exhibit and display the impugned advertisements for the reason that it would be difficult to estimate:

(1)    the lost sales caused by the impugned advertisements, particularly due to variations in the cold and flu season;

(2)    the loss in pharmacy support and pharmacist recommendations;

(3)    the long-term brand damage to Difflam; and

(4)    the loss in consumer confidence in Difflam products.

65    Each of the above harms was said to be particularly so as the consumer reach of Reckitt Benckiser’s advertising, particularly in the form of the electronic billboard advertisement, was increasing everyday as new consumers walked past it, and particularly given the timing of the advertisement during the peak cold and flu season.

66    Secondly, iNova submitted that Reckitt Benckiser would suffer little inconvenience if the interlocutory relief sought were granted, for the reasons that:

(1)    the advertising campaign was to conclude on 2 September 2018, with no further aspects of the campaign to be launched and no additional pharmacies in which the advertisements were to be displayed;

(2)    Reckitt Benckiser accepted that removing the electronic billboard advertisements would be a relatively quick and easy process; and

(3)    iNova did not seek interlocutory relief that Reckitt Benckiser representatives take active steps to have the in-store poster removed, but, rather, that it not be exhibited or displayed at new pharmacy locations and that Reckitt Benckiser make requests to the existing pharmacies involved in the advertising that the in-store posters be removed. As such, this would not incur the disadvantages cited by Reckitt Benckiser as to the length of time and cost that it might take for Reckitt Benckiser representatives to attend and remove the posters from pharmacies.

67    Thirdly, iNova submitted that Reckitt Benckiser’s evidence concerning the limited distribution of the in-store posters should be considered with a critical eye. This issue was not something to which I attached much, if any, weight. That evidence did not go so far as to prove that there would be a significant difficulty in complying with the limited form of relief that iNova was seeking. I therefore did not consider this issue further.

68    Finally, with regard to the allegation of delay made by Reckitt Benckiser, iNova accepted that it delayed seeking interlocutory relief. However, iNova noted that it first became aware of the Strepfen Advertising Materials on 10 July 2018 and that it made complaints in writing to both Reckitt Benckiser and the Therapeutic Goods Administration shortly thereafter. iNova submitted that it was not unreasonable that it only became aware of the advertisements on 10 July 2018, despite the materials having first been published on 6 June 2018, particularly in light of the way in which the materials were rolled out to large pharmacy chains in “reverse-alphabetical” order. As such, iNova justified its delay in commencing proceedings and seeking interlocutory relief.

69    Reckitt Benckiser made the following submissions that the balance of convenience did not favour the grant of interlocutory relief to iNova:

(1)    While the efficacy of Difflam lozenges was clearly an issue in dispute, there was a lack of evidence as to any serious risk of the Strepfen Advertising Materials having an adverse effect on the Difflam brand or the marketing or sale of Difflam lozenges, and such an effect should not be assumed by the Court. Reckitt Benckiser submitted that there was a lack of evidence adduced as to diminished sales, and that it would be difficult to ascertain whether there could be such sales or reputational damage. In any event, Reckitt Benckiser submitted that any lost sales of Difflam for this winter period could be quantified and compensated if iNova succeeded at a final hearing, and that damages would be an adequate remedy for iNova to seek.

(2)    There was insufficient utility in granting interlocutory relief at this late stage, as:

(a)    the Strepfen advertising campaign would cease on 31 August 2018 in any event;

(b)    the advertising campaign had already run its course in many pharmacies, having been removed or replaced in many pharmacies already; and

(c)    the proceedings were commenced a significant time after the advertising campaign had begun, including after a complaint to the Therapeutic Goods Administration that did not result in Reckitt Benckiser having to cease the advertisements.

(3)    iNova’s conduct of the proceedings was, it was submitted, a relevant factor weighing against the utility in the grant of interlocutory relief, in that iNova had resisted an early final hearing but filed expert evidence at a late stage in the interlocutory proceeding, such that neither the experts nor Reckitt Benckiser had had sufficient time to respond to the claims and evidence brought at such short notice. It was submitted that a final hearing would be the appropriate way to resolve the dispute, and the grant of interlocutory relief would be a disproportionate response to what was already a weak prima facie claim.

70    The competing arguments for the parties were finely balanced in all the circumstances. Both parties put forward objectively compelling arguments. However, in the final result, I was satisfied that iNova had established, albeit on a more limited basis than it asserted, a sufficiently strong prima facie case for the grant of the limited injunctive relief that it sought, the usual undertaking as to damages having been given to the Court by senior counsel for iNova at the interlocutory hearing. Overall, iNova’s arguments as to the balance of convenience were stronger than those advanced by Reckitt Benckiser, especially having regard to the real risk of damage to reputation by the clear prima facie case for the Longer Lasting Relief Representation, to the relatively low level of inconvenience to Reckitt Benckiser and to iNova’s delay in seeking relief being reasonably explicable in all the circumstances. Further, a particularly important factor in favour of the making of these orders was consumer protection, rather than just competing commercial interests. That factor aligned with iNova’s case on this issue, and weighed against Reckitt Benckiser’s case. That factor, while not of itself conclusive, was an important consideration further tipping the evaluative exercise in favour of the grant of relief as a matter of the balance of convenience.

71    I was therefore satisfied, after considering the above factors at the interlocutory hearing and subsequently further reflecting on the oral and written submissions, that, overall, the balance of convenience lay firmly in favour of granting the interlocutory relief sought by iNova. That relief was limited in scope, and I was satisfied that, to at least some degree, its effect would be to bring forward or concentrate what would have been done anyway, starting in three weeks from the time that the orders commenced to take effect.

Conclusion

72    It was in light of the foregoing that I made the orders on 10 August 2018.

73    Because of the mixed outcome reflected in these reasons, the costs of the interlocutory application are reserved until the final determination of iNova’s originating application and statement of claim.

Associate:

Dated:    26 September 2018